An Analysis of Various Types of Supply Chain Management Systems: Case of Global Public Sector versus Private Sector Procurement

Abstract

Public institutions are subject to huge range of legislative restrictions, controlled by the legislative, executive and judicial authorities and subject to criticism by the public at large as compared to private sector procurement processes which are led by profit motives (Fourie, 2009). In both public and private sector procurement, the goods, services and or works have to be acquired, which is the most similarity between these two sectors. In the final analysis, Oughton (2007) alluded to the fact that, it is how well these concepts work that truly determine their worth; it is clear that public and private sector supply chains truly are "two sides of the same coin" and that many private sector best practices can be used in the public sector with great success and with little or no modification; thereby fostering the much needed partnership between these two sectors. A general concern among public sector procurement processes is a low level of trust to the suppliers in that the best price offer ultimately is selected or given high weight like in the South African 80/20 and 90/10 preferential point system, however there is a contrast, in that the private sector often considers performance equally or even more important than price so the 80/20 and 90/10 principle wouldn’t work in private sector procurement. Private sector procurement managers are said to be more interested in the quality of performance than costs; therefore the public sector procurement officials can learn more of these good practices from the private sector.